Abe's farm reforms open rich-poor food gap

Japanese families may, in the not distant future, no longer be able to continue their tradition of munching lots of mikan (tangerines) at family gatherings for a New Year’s celebration because production of this popular citrus fruit is declining fast.

In the Usami district of Ito, Shizuoka Prefecture, which used to be a major production center of tangerines, many orchards are being shut down as farmers shift their strategy to reaping small quantities of high-priced varieties like dekopon in a bid to boost their income.

In the 1960s, when Japan had just managed to overcome its postwar food shortage crisis, the agriculture ministry encouraged an expansion of fruit production in anticipation of people’s diversifying tastes for food. Domestic tangerine production in the middle period of the 1970s peaked at about 3.7 million tons per year. But import liberalization of grapefruit and other citrus fruits starting in the 1970s forced Japanese farmers to reduce their tangerine production, which has now dwindled to about 780,000 tons a year.

This has also put an end to domestic production of canned tangerines, which used to be among Japan’s major export items. In the 1970s, about 80,000 tons of canned tangerines were sold overseas. Today, Japan imports about the same amount of canned tangerines from other countries.

While more than 70 percent of tangerine growers have quit producing, the remaining few with high management capabilities have survived by producing dekopon and other high-grade varieties and adjusting shipment timings by using greenhouses.

This story about changes in tangerine production typifies the core of “agricultural reform” that the administration of Prime Minister Shinzo Abe has pursued for the past five years since he took office.

Achieving a “shrinking equilibrium” is a proper way to summarize the administration’s farm policy, which is aimed at leaving out inefficient farmers, retreating from farming areas with unfavorable conditions, fostering highly capable farmers, reducing supplies, shoring up prices and thus raising farmers’ income. The Sato-nishiki brand of cherry and the Shine Muscat brand of grape are among typical high-grade varieties being encouraged under this policy.

Reducing production and upgrading food products can be a correct way of thinking in business management. But the trouble with the Abe administration is that it did not carry out any meaningful debate on the merits and demerits of the policy and forced farmers to adopt business concepts in agricultural production. Thus it is totally devoid of any viewpoint to protect and foster agriculture in farming regions. Ken Saito, the minister of agriculture, forestry and fisheries, asserts that farmers should endeavor to sell more of their products abroad because domestic markets will shrink due to the dwindling population. But the fact is that with the exception of rice, no farm goods in Japan are produced in excess of domestic demand.

Japanese consumers will not benefit from the policy of concentrating in production of high-grade farm products and boosting exports because that will enable only the wealthy to afford to buy domestically harvested foodstuffs. This is particularly true of livestock products. Even today, domestically produced wagyu is consumed only by wealthy people both at home and abroad. Ordinary Japanese citizens eat inexpensive imported beef. If this trend continues, Japanese farmers will become “slaves” to provide the wealthy with high-quality food.

How does Japan stand with regard to the food self-sufficiency rate? The calorie-based rate for fiscal 2016 dropped 1.91 percentage points to 37.58 percent, the lowest since 37 percent was recorded in fiscal 1993 when the rice harvest was poor due to a cold spell.

Administrative vice farm minister Masaaki Okuhara says that the food self-sufficiency rate rose by 2 percentage points to 68 percent in terms of production value. But it should be noted that the increase was brought about by rising rice prices stemming from a shortage of rice for commercial use and poor harvest of various farm products caused by bad weather and natural disasters.

A question arises as to why the price of rice as a staple food has gone up despite the Abe administration’s call for making agricultural management more efficient. One reason is that farmers are becoming increasingly keen on producing and selling high-class rice targeted at the wealthy. This category of rice is known by such brand names as Shinnosuke (from Niigata Prefecture), Ichihomare (Fukui Prefecture) and Konjiki-no-kaze (Iwate Prefecture).

Another factor is price controls by the government. While putting an end this year to the 40-year-old policy of the government curtailing rice paddies, the Abe administration is encouraging farmers to produce more rice to be fed to livestock by offering big subsidiaries of ¥80,000 to ¥100,000 per 10 ares of rice paddies used for production of such rice. This measure results in reducing the supply of ordinary rice, which then pushes up rice prices. Thus the Abe administration is artificially controlling rice prices, not by changing the production amount but by changing the distribution amount. With rice as a staple food becoming comparatively more expensive than wheat (from which bread and noodles are made), rice consumption is bound to go down further.

To receive the subsidies for producing rice to be fed to livestock, farmers do not have to produce anything special by acquiring new equipment or technology. All they have to do is label each package as “for livestock.” Indeed, about half of the rice so labeled is actually a well-known brand such as Koshihikari or Akita-komachi that was grown for human consumption.

If the Abe administration’s farm policy continues, the domestic rice market will be polarized into expensive brands and cheap rice sold for commercial use. The latter category includes certain amounts of rice that Japan is importing from other countries under its pledge in the course of the Uruguay Round of multilateral trade negotiations. In the past, some imported rice, forced upon Japan by the United States as “minimum access” rice to the Japanese market, was found to be contaminated with mold.

The fact virtually unknown to Japanese citizens is that while livestock is fed with high-quality rice, ordinary people are eating minimum access rice. Unless a restaurant clearly notifies customers that the rice served by it is a specific brand harvested in Japan, it is safe to assume that the rice is a blend of several rice varieties originally intended for commercial use.

The effect of the agricultural policy of “shrinking equilibrium,” pushed by vice minister Okuhara, is already apparent in statistics. Not only is the calorie-based self-sufficiency rate going down, the “index for food self-sufficiency,” which shows the potential food production capacity, has also been declining for seven straight years since the ministry started making estimates. The decline has been especially conspicuous since the Abe administration’s farm policy was put in full swing three years ago.

The basic law on foods, agriculture and agricultural villages points to the importance of increasing domestic agricultural production and a proper combination of domestic harvest with imports and stock for emergencies. It is self-evident that the government’s farm policy should be aimed at securing a stable supply of quality food for citizens — in other words, food security. The agricultural reform being pushed by the Abe administration runs counter to this principle and is so reckless that it could lead to the ruin of the nation.

This is an abridged translation of an article from the January issue of Sentaku, a monthly magazine covering political, social and economic scenes. More articles in English can be found at www.sentaku-en.com .